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22 Aug 14 On ATO's audit threats - the ATO responds

THE ATO RESPONDS to the feedback from Member 110 in 2014 TAXVINE No 28 (8 August 2014) and Members 111 and 112 in 2014 TAXVINE No 29 (15 August 2014) about the perceived threatening nature of the ATO's letter entitled "Lodge Immediately to Avoid Audit".

"Lodging activity statements and income tax returns by the due date is a legal obligation for those in business, and most businesses willingly comply. Regrettably we need to send approximately 4 million reminders each year and last year, we needed to enforce lodgment of over 1.19 million income tax returns.

Where a business is not meeting its obligations to lodge, it is obtaining an unfair advantage over those businesses that have lodged on time. The ATO works to protect those businesses that meet their responsibilities and we appreciate the assistance of tax agents in this process. It is regrettable if some tax agents find it intimidating when the ATO provides a clear explanation of the steps it may take to protect honest businesses.

It is encouraging to hear that half of the overdue forms were lodged in the window of time from when they became overdue and when the tax agent was advised. For the ATO this is indicative of a tax practice which is taking active steps to manage the lodgment obligations of its clients. While we will continue to ensure that there is no doubt about which forms are overdue, we do appreciate that many practitioners are also very active in ensuring lodgment as well."